I will be at the Prop 8 protests on Saturday, November 15.
I can't figure what sign I would make, or what I would want to say. I know it's petty to talk about money, but when I was in a relationship, estate taxes were a big worry. I own my house outright. We could have done a joint lease or something, but then I would have lost all the tax benefits from owning a house.
I already have maxed out the effective exclusionary amount, so if I die, my partner would have to come up with a quarter million dollars for the IRS. Since my estate wouldn't have that much liquid cash, my partner would probably have to sell the house. To me, that was a big difference between being married and being in a "civil partnership"... cold hard cash.
I'm a little confused because in one paragraph you suggest you aren't in a relationship anymore but in the next you suggest that you are.
Is the current situation really more complicated than a divorce would be / have been? My impression, quite honestly, is that for straight people, marriage has caused as much financial heartache as it has prevented. In part because it's so easy to do that people don't think through the consequences.
In 2009, the exclusion amount goes up to $3.5 million, so my point become moot. Who knows what estate taxes will look like under and Obama administration.
No, I'm single. We broke up in May of this year. I was speaking methaphorically, as in "my partner-if-I-had-one would have to pay estate tax". However, my ex is still the sole beneficiary of my will, since I can't think of anybody better to leave everything to.
If you are interested in him inheriting the house, have you looked into adding him to the deed as a joint tenant? That way the house is no longer part of your estate when you die. However, it's not something you can undo if you change your mind down the road.
We've done this twice now - the first time when John made me a JT on the San Jose house, which allowed us to later claim TWO deductions on the profit and pay no tax at all on the proceeds. The second time was when Bill made us both JTs on our current property. (I'm still a little nervous about this because it seems odd to me that the IRS wouldn't have their hands in our agreement somehow, but I can't find any reason to believe they would.) The only thing that we have to deal with is that if Bill dies the tax basis on the land resets to the current value. (That might actually end up reducing our taxes given that values have gone down recently.)
You sound pretty well informed so maybe this is all redundant... quite honestly the joint tenancy approach strikes me as odd because it looks rather too easy to shuffle wealth around without taxes, so there has got to be a catch SOMEWHERE. But I haven't found one!
>that he can't inherit the stock. Would you be
>able to specify in your will that whoever gets
>the stock has to pay the tax?
Yes, it's very tricky. If my estate wanted to cash out my 7% interest in the family company, they would have a tough time coming up with two million dollars. In the worst case, it could sink the company for years. So, there is a payoff schedule, but that could extend long past when estate taxes are due.
>If you are interested in him inheriting the
house, have you looked into adding him to the
>deed as a joint tenant?
Well, I'm single now, and nobody lives in the house, so it's no longer an issue. But I don't think joint tenancy is a "get out of jail free" card. It would have created other problems: his other existing property, I might have lost the yearly tax benefits, and as you said it's harder to remove. In the worst case, your divorced partner could take out second or third mortgages on the property and royally screw you.
>quite honestly the joint tenancy approach strikes
>me as odd because it looks rather too easy
It's unfair that as gay people we have to perform such contortions in order to live together.
It is not identical to marriage, but it is so similar in so many respects that wanting marriage while shying away from joint tenancy might be a sign that marriage isn't what you really want!
http://en.wikipedia.org/wiki/Concurrent_estate
I'd be scared that you would never be able to break up: the ex has a permanent right to the property, even if I paid the entire mortgage. Or vice versa... my ex could be responsible for all my debts after my death - even in EXCESS of the value of the house.
What a fucking mess.
Not breaking up is sort of the point. Joint tenancy is in some ways more of a marriage than marriage itself. Ironically marriage is therefore attractive because it makes divorcing so much simpler...
Like a lot of things, if there are not problems, joint tenancy is great. But if your partner goes psycho and wants to screw you... he could get multiple liens on your house, to the point you'd lose your home. Laws were created when things *don't* work. As long as life is good, EVERYONE stays out of the courts and the jails.
If my love life is wonderful it doesn't relieve the necessity for legal protection for the rest of the world.
>than a divorce would be / have been?
Tough question. Since we weren't legally married, we didn't have a template of what to do when we broke up. We've managed an equitable settlement without using lawyers, but I still feel like I steamrolled my ex through some complicated financial decision. I was the numbers guy... not him.
I'm hoping I can sell my house in Denver and give him $100,000 of the proceeds to help him with retirement. It's important for me to make sure his house and car are paid off next year, so he can go on with a life without me.
I was tired of changing my will every time my financial situation changed, just because my civil partner didn't automatically inherit my property. The question is whether the United States wants gay couples to unite and be able to afford a life together. At this point, the answer is clearly, "No." They want us to convert and stop being gay. They want us to go away. They are using laws to get that point across.
I'm not going to wade into this discussion with advice or suggestions.
I know that transfers between a husband and wife are not taxable.
We used that several times to build my parent's estate plan.
We need civil union rights to be equal to Marriage rights.
It could be "separate but equal" but it is not going to be.
That's why we are out there on the line making noise.